The charges side by side
These are the member charges each scheme publishes (checked 27 October 2026).
| Charge | Nest | People's Pension |
|---|---|---|
| Contribution charge | 1.8% of every contribution | None |
| Yearly management charge | 0.3% of the pot | Up to 0.5% of the pot |
| Flat yearly fee | None | £6.50 (scheme year 1 April to 31 March) |
| Discount for bigger pots | None | "Savings reward" cuts the 0.5% by 0.05% to 0.3% once the pot is over £3,000 |
| Charge to transfer a pot in | None | Not listed as a charge |
What the 1.8% means in practice: on a £100 monthly contribution, £98.20 is invested in Nest and £1.80 goes in charges before any growth. On People's Pension the whole £100 is invested, but the yearly percentage is higher, and the £6.50 fee matters on small pots. On a £500 pot, £6.50 is 1.3% of the pot.
People's Pension doesn't publish a single reward table on its member pages. It gives the 0.05% to 0.3% range and shows your actual rate in your online account under "Charges". So your yearly charge there is somewhere between 0.2% and 0.5%, depending on your pot.
Worked examples: what the charges cost
The table compares the final pot under each scheme's charges against the same savings with no charges at all. Assumptions: 5% a year growth before charges, contributions paid once a year, no inflation. People's Pension is shown at the full 0.5% and at 0.3% after a large savings reward, both with the £6.50 fee. These are illustrations, not forecasts.
| Scenario | No charges | Nest | People's Pension at 0.5% | People's Pension at 0.3% | People's Pension is cheaper if its yearly charge is below |
|---|---|---|---|---|---|
| £2,000 a year for 10 years | £26,414 | £25,483 | £25,567 | £25,870 | about 0.55% |
| £2,000 a year for 30 years | £139,522 | £129,436 | £126,541 | £131,399 | about 0.38% |
| £5,000 a year for 30 years | £348,804 | £323,589 | £316,944 | £329,111 | about 0.39% |
| £50,000 transferred in, no new money, 20 years | £132,665 | £124,928 | £119,807 | £124,720 | about 0.29% |
Three things stand out:
- Over short periods People's Pension tends to win. With 10 years of contributions, even its full 0.5% charge costs less than Nest's 1.8% on every payment.
- Over long periods Nest's lower yearly charge tends to win. Over 30 years People's Pension needs an effective yearly charge below about 0.38% to beat Nest. Whether you get there depends on how much of the savings reward applies to your pot.
- For a large pot with no new money, Nest's 0.3% is hard to beat. The 1.8% only applies to new contributions, so it costs nothing on a transferred pot. People's Pension would need a yearly charge under about 0.29%.
Fund choice
Both schemes put you in a default fund unless you pick something else, and both offer an ethical fund and a Sharia fund.
| Nest | People's Pension | |
|---|---|---|
| Default | Retirement Date Fund for your expected retirement year | Global Investments (up to 85% shares), moving to a Pre-Retirement Fund near retirement |
| Higher risk | Higher Risk Fund | Global Investments (up to 100% shares) |
| Lower risk | Lower Growth Fund | Global Investments (up to 60% shares), Cash Fund |
| Ethical | Ethical Fund | Ethical Fund |
| Sharia | Sharia Fund | Shariah Fund |
| Approaching retirement | Guided Retirement Fund | Pre-Retirement Fund, Annuity Fund |
Most members of both schemes stay in the default fund. People's Pension says about 98% of its members use the default arrangement. Switching funds has no charge in Nest.
Tax relief works the same way in both
Both schemes use relief at source by default. Your contribution comes out of your pay after tax, and the scheme claims 20% basic-rate relief from HMRC and adds it to your pot. So £80 from your pay becomes £100 in the pension.
Two consequences:
- Low earners still get the 20% top-up. Relief at source pays basic-rate relief even if your earnings are below the £12,570 personal allowance. Under a net pay arrangement, someone below the allowance gets no relief.
- Higher-rate taxpayers must claim the rest. If you pay 40% or 45% tax, the extra 20% or 25% isn't added automatically. Claim it through Self Assessment or by contacting HMRC. See higher-rate pension relief.
Either scheme can also be paired with salary sacrifice if your employer offers it. Sacrifice saves National Insurance as well as tax.
Should you consolidate old pots into one of them?
Your employer picks the scheme for your current job, and its contributions (and any employer match) only go into that scheme. The real choice is what to do with pots from earlier jobs:
- Find your charges. Nest's are fixed. For People's Pension, look up your current savings reward in your online account.
- Think about how long the money will stay invested. A pot with 20 or more years to run favours the lower yearly charge. Small pots and short horizons favour no contribution charge, but watch the £6.50 fee on very small pots.
- Check what you'd give up. Older pensions, especially pre-2000s personal pensions and defined benefit schemes, can have guarantees or protected benefits that are lost on transfer. Nest and People's Pension pots usually have none, but check before moving anything else.
- Ask the receiving scheme to arrange the transfer. Nest takes transfers of £50 or more.
In short
The charges are built differently. Nest takes 1.8% of every contribution plus 0.3% a year. People's Pension takes up to 0.5% a year plus £6.50, cut by a savings reward on pots over £3,000. In our examples People's Pension is cheaper over about a decade. Over 20 to 30 years Nest is cheaper unless the People's Pension reward brings its yearly charge below about 0.38%. Both have ethical and Sharia funds, and both add basic-rate relief at source. For your current job the scheme is your employer's choice. The decision that matters is where to keep old pots, and that comes down to your pot size and how long it will be invested.